To combat the economic consequences of the COVID-19 pandemic, the government approved Decree-Law 10-J/2020 of March 26 (the “Decree-Law”). The Decree-Law established a set of economic measures to protect liquidity and treasury, and in this document, we focus on the financing moratorium.

Since it was first published, the Decree-Law has been amended by Law 8/2020 of April 10, Decree-Law 26/2020 of June 16, Law 27- A/2020 of July 24 and Decree-Law 78-A/2020 of September 29, so we will now summarise the moratorium rules currently in force.

1. BENEFICIARY ENTITIES

For the purposes of the Decree Law, the Beneficiary Entities are:

a) All companies with their registered office and economic activity in Portugal, except those in the financial sector, provided that:

(i) As at 18 March 2020, they have not been in arrears or in breach of financial obligations to the Institutions for more than 90 days (or, if they are, they do not exceed the materiality thresholds set out in Notice of Banco de Portugal 2/2019 and Regulation (EU) 2018/1845 of the European Central Bank).

(ii) They are not in a situation of insolvency or of suspension or cessation of payments, or

(iii) On that date, the credits are not already subject to enforcement; and

(iv) They do not have tax or social security debts.

b) Individuals, in respect of mortgages (home loans) for permanent owner-occupied homes, who meet all of the following conditions:

(i) On the date of publication of the Decree-Law, they have not been in arrears or in breach of financial obligations for more than 90 days to the Institutions (or, if they are, they do not exceed the materiality thresholds set out in Banco de Portugal Notice 2/2019 and Regulation (EU) 2018/1845 of the European Central Bank).

(ii) They are not in a situation of insolvency or of suspension or cessation of payments.

(iii) On that date, the credits are not already subject to enforcement; and

(iv) They do not have tax or social security debts.

Additionally, they must be in at least one of the following situations:

(i) They are in preventive or disease isolation.

(ii) They are providing assistance to children or grandchildren.

(iii) Their normal working hours have been reduced.

(iv) Their employment contract has been suspended.

(v) They are registered unemployed at the IEFP.

(vi) They are workers eligible for extraordinary support for a reduction in the economic activity of the self-employed.

(vii) They are workers of entities whose establishment or activity has been closed under the decree of the state of emergency.

(viii) They have suffered a temporary drop in overall household income of 20% or more as a result of the pandemic.

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